SEJONG, SOUTH KOREA / RankWire.AI / – South Korea’s consumer prices increased by 3.1% in August compared to the previous year, according to official figures. This acceleration from 2.8% in July pushed the headline inflation rate back above 3%. The consumer price index hit 120.05, with 2020 serving as the base year of 100. Additionally, prices saw a 0.2% rise from July. The Ministry of Data and Statistics published the August data on September 2.
Fuel expenses continued to be a primary contributor to inflation during the period. Petroleum product prices grew 14.2% year-over-year, though this pace slowed compared to July. Diesel prices surged 19.6%, and gasoline costs increased 11.5%. Petroleum products contributed 0.54 percentage points to the annual consumer price growth. Given South Korea’s heavy dependence on imported energy, domestic fuel prices remain highly responsive to fluctuations in global energy markets.
Mobile phone service charges also experienced a notable annual rise. Prices for mobile services went up by 26.7% from August 2025, largely due to an unusually low comparison base. Last year, SK Telecom offered substantial discounts for a month following a data breach. Government estimates indicated that without this mobile service effect, headline inflation would have been around 2.5%. As a result, this temporary comparison played a significant role in the August annual increase.
Fuel and mobile expenses drive overall inflation
Core inflation, excluding food and energy, also saw an uptick in August, climbing 3.4% from the previous year. This marks the highest annual core inflation rate since May 2023. When excluding agricultural products and petroleum, the core index increased by 3.1% over the same period. The index for living essentials rose by 3.2%, with food prices up 0.8% and nonfood items climbing 4.8%.
Broader price movements reflected increases in both industrial goods and services. Prices for industrial products rose by 3.7% year-over-year in August. Service costs also advanced 3.7%, while electricity, gas, and water prices increased slightly by 0.4%. Insurance premiums went up by 13.4% from the previous year. Additionally, overseas package tour prices climbed 14.9%, further contributing to the rise in service-related costs during the month.
Food prices decline as service costs continue to rise
In contrast, prices for agricultural, livestock, and fishery products decreased by 2.6% compared to the previous year, helped by falling vegetable and fruit prices. Fresh food prices dropped 6.7% annually, including a 9.8% decline in fresh vegetables. Fresh fruit prices fell by 10%, whereas fresh fish and seafood prices increased by 4.1%. Imported beef prices saw a 6.2% rise, with domestically produced beef prices climbing 3.3%.
The August report revealed uneven inflation across key household expenditure categories. Transportation costs increased by 7.2% year-over-year, while communication expenses rose significantly by 16.6%. Recreation and cultural expenses grew by 4.9%, and costs for restaurants and accommodations increased by 2.8%. Prices for housing, water, electricity, and fuel went up 1.9%. The government estimated that nationwide fuel price caps helped reduce August inflation by approximately 0.3 percentage points, partially offsetting the impact of higher petroleum prices.